Are Boomerang Kids Overstaying Their Welcome?

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A new study finds millennials and baby boomers disagree about how long young adults should live with their parents after they graduate from college.

The Coldwell Banker Real Estate Survey, released this morning, found that adults 18 to 34 are OK with their peers moving back in with their parents for up to six years after college, while parents 55 and older believe kids should be out of the house within four years after college. One in five Americans, meanwhile, thinks it’s OK for adult children to live at home for as long as they want.

“The economy is a component in this, but it’s also just taking longer developmentally for this generation to grow up and become adults,” says psychotherapist Robi Ludwig, who worked with Coldwell Banker on the survey. “Because emerging adults are living at home more frequently, there’s been a mind shift and this is the new normal. It doesn’t seem abnormal or like you’re unsuccessful.”

Indeed, the data shows that an increasing number of millennials remain in their childhood homes well into adulthood. A Pew Research study released earlier this month found that in 2012, 36 percent of the country’s 18-to-31-year olds lived with their parents – the highest share in at least 40 years.

Among the factors pushing more young adults to live at home: a tough job market, rising college enrollment (both commuters and college students living in dorms were counted as living with their parents), and a declining marriage rate among young people. According to the Pew study, 47 percent of unmarried millennials lived at home, versus just three percent of married millennials.

The trend has hampered the housing recovery as fewer young adults are forming households of their own and boomers are less able to downsize into traditional retirement homes. Thanks to tight credit and limited inventory, first-time homebuyers currently comprise about 29 percent of the market, though historically they’ve accounted for about 40 percent of purchases.

Of those surveyed by Coldwell Banker, 70 percent believe that too many adults living at home with their parents are avoiding responsibility, and 65 percent say that too many are overstaying their welcome.

“These findings are no surprise, given the challenging labor market for college graduates and the fact that there’s been a substantial recovery in both home prices and a major increase in rents,” says M.J. Nodilo, founder and president of Pathlight Investors LLC in Phoenix.

In some cases, it makes more financial sense for parents to have their adult children move back home with them, than to have the children move out but still rely on their parents financially.

“If they’re living on their own, but you’re paying for it, it can be much worse,” Nodilo says. “And we’ve seen that go on for much longer than many parents plan for, and it’s a challenge for parents to turn off that [financial] spigot.”

The longer that parents support their children – either at home or by paying a portion of an adult child’s expenses while he lives on his own – the more those parents are risking their own retirement security. Even today’s teens expect to rely on their parents well into their adult years. A study last year by the Allstate Foundation found that a quarter of teens believed they would be financially reliant on their parents through at least age 25.

“As you get older, your earning power is declining, and your savings time before retirement is declining,” Nodilo says. “You need to pay yourself first. Doing things for your adult children now could impact you in a negative way later.”

The Coldwell Banker study found that women are more tolerant of boomerang kids than men, with 16 percent of men believing that adults should never live at home with their parents after college, versus 11 percent of women. More than half of Americans said that they believed when children return home after graduating from college it prevents the parents from moving on with their lives.

Life + Money Editor Beth Braverman covers all things personal finance. Formerly a senior reporter and social media editor at MONEY magazine, she’s also held gigs as a newspaper reporter and trade magazine editor.